"...it is worth remembering that real wealth lies not in debt but in educated people, laws, and work ethic, as well as in the quality and quantity of fixed assets and the effectiveness of corporate organization. We...have just tripped on make-believe assets and we now have to deal with chronic deleveraging and bruised animal spirits. When we have dealt with this crisis, all of our assets will still be sitting around waiting to be fully used once again. It is helpful to consider that after the Depression, the U.S. GDP got back on its original trendline as if the Depression had never occurred."- Jeremy Grantham

With the above quote in mind, it's worth considering the somewhat surprising fact that the U.S. dollar is down in value roughly 98%compared to gold (as David Puddy from Seinfeld would say..."yeah, that's right") over the past century while the standard of living has increased, give or take, sevenfold during that time. So the idea that the long-term strength of a currency is critical to the growth in a country's standard of living is clearly not correct. I say this because if you listen to many debates on currency, there is often an implied assumption that the drop in a currency's value will inevitably result in a drop in the standard of living for those that live in the country.So what's going on here?

Take a place like Zimbabwe. When too much currency gets printed the value goes down but that's not the problem. What is the real problem? A lack of underlying assets (tangible and intangible) and growth in those assets to support the population. In contrast, our destruction of the dollar over the past century did not ruin us because we have grown the intrinsic value of our assets significantly during that time. The growth in a society's assets over time determine wealth and increases in the standard of living -- not the currency's strength.As Buffett once said, in the long run it wouldn't matter if our currency was converted to shark's teeth."You know, if the dollar becomes way--worth way less, we will sell See's Candy for more money. I mean, it won't be more real dollars, but we--if somebody's willing to give up 15 minutes of their labor or half to buy a pound of this or to buy six cans of this, they'll do the same thing and it won't make any difference whether shark's teeth are being used for money, basically.

So the best--well, the best assets you can have during inflation is your abilities. I mean, because if you're the best doctor in town or the best lawyer in town or the best broadcaster in town or whatever it may be, you will always command a certain percentage of the resources of society. So your own talents are the most important thing. But if you don't have any talent like I do, you try to buy into other people's talents. And you know, this is the best candy. This is the best soft drink, as far as I'm concerned, and it will be that way 10 years from now. And whatever the value currency is, we'll get our share in that--in terms of that value at that time." - Warren Buffett

Someone sitting at some watering hole 100 years ago who was arguing that the U.S. currency would be debased 98% in the next century, would probably also have been arguing the U.S. was going to be a pretty terrible place economically as a result. Yet, we've had a significant increase in prosperity because the underlying assets have grown enormously. That's ultimately what matters. Fiat currencies must, of course, be relatively stable in the short-to-medium run but, in the long run, they will almost always lose value against things like good businesses, land, gold etc. Fiat currencies aren't good stores of value long-term and probably never will be.

It's just too easy to print more when times get tough.

So assume paper currency debasement is pretty much a given and will likely continue over the next 50 years and beyond. It just does not mean we won't also be prospering in a big way. The best way to manage this for an investor? In my view it is owning shares in good businesses. This both protects against wealth erosion caused by inflation (i.e. devalued paper money) and provides a way to capture a portion of the growth in the intrinsic value of society's underlying assets.